Why Overall Equipment Efficiency (OEE) Is a Poor Measure of Reliability

Since the mid‑1970s I have advocated for a close partnership between Operations and Maintenance—essentially, Operations + Maintenance = Production. Adding Stores and Engineering to this equation only strengthens the result.

A truly collaborative partnership is one of the most critical factors that distinguish good or world‑class plants from the rest.

Other observations that consistently correlate with high performance include:

• Long‑term, consistent, engaged, and visible plant leadership
• The right people in the right roles
• Well‑defined and rigorously implemented work‑management processes

To build that partnership, everyone must aim for the same goal: maximizing manufacturing output, measured as Actual Quality Tons Produced ÷ Capacity Tons. The focus should then shift to identifying where, when, and why losses occur—rather than assigning blame to a specific department.

I have witnessed countless meetings where the discussion centers on classifying a loss as Operations, Mechanical, Electrical, or Automation. Rarely do these meetings lead to Root‑Cause Problem Eliminations (RCPE).

Some facilities use Overall Equipment Efficiency (OEE) to gauge reliability, combining:

% Quality × % Time × % Speed

where:

• % Quality is yield or quality tons produced as a percentage of total tons.
• % Time is the proportion of time a machine is operating (e.g., % of “Sheet on Reel” for a paper machine based on 8,760 hours per year).
• % Speed is the actual speed relative to the standard speed for the given quality or grade.

This metric is useful only when applied to the entire plant, not to individual departments.

Below is a typical example from pulp and paper mills worldwide where OEE is reported by department:

Department heads celebrated OEE figures ranging from 97% to 99%. However, when the departmental results are aggregated, the true Overall Production Efficiency (OPE) falls to 88.5%.

Using OPE as a single KPI for Operations and Maintenance—and extending it to other departments—creates an inclusive foundation for partnership and continuous improvement.

Measuring efficiency by department breeds finger‑pointing, silo mentality, and inaction. When a unit’s OEE is high, people may feel their performance is satisfactory, even though the plant’s overall output suffers.